Freddie Mac: Mortgage rates ‘pause’, looming recession may be to blame

Interest rates spiked in recent months from record lows.

Updated: July 2, 2022 - 3:50pm

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Spiraling mortgage rates have “paused” for the time being, Freddie Mac said this week, with the potential for a significant recession likely being at least partly to blame.

Freddie Mac said on its mortgage outlook tool that “the rapid rise in mortgage rates has finally paused, largely due to the countervailing forces of high inflation and the increasing possibility of an economic recession.” 

“This pause in rate activity should help the housing market rebalance from the breakneck growth of a seller’s market to a more normal pace of home price appreciation,” the regulator said. 

Mortgage rates had reached historic lows in the summer of 2021, dipping as far down as under 2.8 percent for 30-year fixed rates before beginning a steady climb higher. 

In mid-June 30-year fixed rates peaked near six percent and appear to have stabilized over the last two weeks, closing this week at 5.7 percent.

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